Nikkei slides 3 pct to two-month low on emerging-market worries

Reuters Staff

3 Min Read

* Index heavyweights, exporters drag down market
* Investors eyeing U.S. GDP, jobs data
By Ayai Tomisawa
TOKYO, Jan 27 (Reuters) - Japan's Nikkei average slid as
much as 3 percent to its lowest in two months on Monday as the
yen soared and global equities dropped on concerns about a
selloff in emerging-market assets.
Index heavyweights led the declines with SoftBank Corp
, the most traded stock by turnover, falling 2.7 percent
and KDDI Corp shedding 3.5 percent.
The Nikkei was down 2.8 percent at 14,968.40 in midmorning
trade after falling as much as 3.0 percent to 14,933.55, marking
its lowest since Nov. 14 and giving up the 15,000 level. Last
week the Nikkei fell 2.2 percent.
The benchmark fell below its 75-day moving average of
15,119.73, and its short-term support is seen at 14,731.17, the
61.8 percent retracement from an October low to a December high.
Monday's slide came after emerging-market assets were hit by
worries about slowing growth in China as well as political
problems in Turkey, Argentina and Ukraine, while expectations of
continued stimulus withdrawal by the U.S. Federal Reserve added
to the gloom.
"It's a repercussion from emerging markets. But it should
not drag on unless there is uncertainty over U.S. growth. What's
more important for the Japanese market in the foreseeable future
is whether the U.S. economy is intact," said Isao Kubo, equity
strategist at Nissay Asset Management.
"If worries about the U.S. economy continue to unnerve
investors, we may have to brace for another selloff."
He said market sentiment has already been dented by weak
December U.S. jobs data, so investors are monitoring U.S. gross
domestic product data to be released this week and January U.S.
jobs figures due out in the first week of February.
The Topix fell 2.7 percent to 1,230.72.
Exporters were battered as the dollar fell as low as 101.77
yen, its lowest level since early December. Sony Corp
dropped 3.1 percent, Nikon Corp shed 2.8
percent and Nissan Motor Co fell 2.2 percent.
A stronger yen erodes Japanese exporters' overseas profits
when repatriated and can hurt their price competitiveness.
The JPX-Nikkei Index 400, a recently introduced
gauge comprised of firms with high return on equity and strong
corporate governance, dropped 2.8 percent to 11,105.17.